How to set your day rate as a tradesperson

Why most tradespeople undercharge

The most common pricing mistake in the trades is setting a day rate based on what "feels right" or what a competitor charges — rather than what you actually need to earn to make the business viable. The result is a busy diary with thin margins and the constant pressure of needing the next job.

Setting your rate correctly starts with knowing your numbers.

Step 1: Calculate your minimum viable rate

Add up all your annual business costs:

• Van: insurance, road tax, MOT, servicing, fuel (~£4,000–£8,000/year for most sole traders)
• Tools and equipment: replacement, maintenance, specialist hire
• Trade association memberships: Gas Safe (~£200–£350), NICEIC, etc.
• Public liability insurance (~£200–£400/year)
• Software and subscriptions
• Accountant fees (~£300–£600/year)
• Training and CPD
• Phone and mobile data plan

For a typical sole-trader tradesperson, annual overheads come to roughly £8,000–£15,000 before you pay yourself a penny.

Step 2: Work out your billable days

A sole trader in the UK has roughly 365 days per year. Subtract:

• Weekends: ~104 days
• Public holidays: ~8 days
• Annual leave (you deserve a holiday): ~15 days
• Sick days and downtime: ~10 days
• Non-billable admin time: ~25 days equivalent

That leaves roughly 200 billable days per year — and that's assuming you're fully booked, which rarely happens in practice. Using 170–180 days is a more realistic basis for calculation.

Step 3: Add your desired salary and profit margin

Decide what you want to take home. If you want to earn £45,000/year (before tax), add that to your overheads. Then add a profit margin — even sole traders should target 15–20% to build a buffer and fund growth.

Example: £45,000 salary + £12,000 overheads + £8,500 profit (15%) = £65,500 ÷ 175 billable days = £374/day minimum day rate.

UK average day rates by trade (2025)

• Plumber: £300–£450/day
• Electrician: £280–£420/day
• Gas engineer: £350–£500/day
• Bathroom fitter: £280–£400/day

Rates vary significantly by region — London and South East rates are typically 25–40% higher than the Midlands or North.

Common pricing mistakes

• Not charging for materials markup: You should add 10–20% to materials costs to cover your time sourcing and purchasing them
• Ignoring travel time: If you spend 30–45 minutes driving to a job, that time has real cost — factor it in
• Competing on price with larger firms: A sole trader's advantage is responsiveness and personal service, not being the cheapest
• Never raising your rate: If you haven't raised your rate in two years, you've had a real-terms pay cut